A crisis in business is anything that might disrupt business operations. What's more, a crisis is a problem or an issue that cannot be solved with current resources, and in the world of business, resources can also refer to the skill set available to the organization. Composing a crisis scenario requires a need to define the crisis, the elements of the crisis and the resources available to resolve the crisis. It is also important to distinguish between the problems that create the crisis and the crisis itself.

Crisis Definition

The first step in composing a crisis scenario is to get specific. The crisis must cause a disruption in business operations. Time and the quantification of sales or earnings lost per hour, day or week can help create a sense of urgency. Be sure the crisis is an emergency that can't be solved with available resources. All other aspects of the crisis scenario originate from the crisis itself.

Three Basic Elements of Crisis

The three basic elements of a business crisis are stress, difficulty in finding a resolution and timing in implementing the solution. The scenario should include stress indicators or observations. Reference the number of hours worked, safety and quality issues, risks, and legal or regulatory concerns in the scenario. A clear explanation of how the crisis is affected by increased stress on business operations can help reinforce the feeling of emergency.

Crisis Events

The events leading up to the crisis can pertain to people or human resources. Embezzlement, deception, insider information sharing, high profile family situations and economic situations that cause financial strain within management can all lead up to a business crisis. Crisis can also be created by external natural events, such as floods, tornadoes, fires and earthquakes. For example, excessively cold weather during the holiday season can lead up to a crisis for a small retail business, cutting into its sales if roads are closed or power is out.

Finalize Scenario

Now that you can clearly define the crisis and the events leading up to the crisis, provide an inventory of available resources and the current status of the situation. Create a time line of problems or issues that led up to the crisis. Include actions that already have been taken. Identify the people to contact for taking action, including anyone who may be able to assist in the crisis. You may also want to provide a tool set that may consist of software applications, communication channels, references or other measures that can help crisis responders.

About the Author

Sharon Barstow started her career in investment banking and then crossed over to the world of corporate finance as a financial analyst. She specializes in banking and corporate finance topics to include treasury management, financial analysis, financial statement analysis, corporate finance and FP&A. In addition to writing, she is the co-owner of a small dog bakery in rural Ohio.